Asian markets struggle
THE dollar rose in Asia yesterday as the chances of an interest rate hike were further boosted, while most markets recovered from early losses to track a Wall Street lead higher.
US markets rallied on October 24 on the back of another upbeat round of corporate earnings and a provisional reading that showed activity in the US manufacturing sector expanded at a faster rate than expected.
That came as St Louis Federal Reserve President James Bullard said December was “most likely” the best time for a tightening of borrowing costs. And Fed Bank of Chicago President Charles Evans said he saw three hikes by the end of next year.
“Bullard did not mince words and explicitly gave the green light for a December lift-off, but suggested that the longer-term rate cycle is much lower,” Stephen Innes, a senior trader at OANDA, said in a note.
The Fed meets next month but is expected to stand pat as that comes days before the presidential election.
The weaker yen gave further support to Japan’s struggling exporters, lifting the Nikkei 0.6 percent to a six-month high.
Shares in Kyushu Railway surged 15pc as the former state-owned firm made its Tokyo trading debut after this year’s third-biggest initial public offering, worth US$4 billion.
“With the US economy looking solid and a rate hike by year-end looming in investors’ minds, the yen is weakening, and boosting expectations for a recovery in earnings in the second half of the year,” Toshihiko Matsuno, a senior strategist at SMBC Friend Securities Co. in Tokyo said.
Among other markets Sydney rose 0.6pc, Shanghai added 0.1pc and Singapore was slightly higher in late trade. There were also positive finishes in Wellington and Taipei.
But Hong Kong closed 0.2pc lower and Seoul shed 0.5pc.
Oil traders were moving uneasily on worries about an agreed output cut by OPEC and Russia, with comments from Iraq’s oil minister that it should be exempt fuelling concerns over whether the deal can be implemented. –